Insights

Here’s Why SoFi Technologies Stock Soared Today

What happened

Shares of SoFi Technologies (NASDAQ: SOFI) jumped 28% on Wednesday after the digital financial services provider issued an upbeat profit forecast.

So what

SoFi’s net revenue surged 57% year over year to $363 million in the second quarter. The fintech company gained more than 450,000 members during the quarter, bringing its total membership to over 4.3 million. That’s up 69% compared to the second quarter of 2021.

Those members are also using more of SoFi’s financial products and services. Its total products at quarter-end were up 79% to 6.6 million.

With annual percentage yields of up to 1.8%, its online checking and savings accounts are proving popular among consumers. SoFi’s deposits leaped 135% to $2.7 billion. This growing deposit base is serving as a stable and relatively low-cost funding source for SoFi’s loan business, boosting its net interest margin in the process.

All told, SoFi’s net loss narrowed to $95.8 million from $165.3 million in the year-ago period. Better still, its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 81% to $20.3 million.

Now what 

These positive trends prompted SoFi to boost its full-year earnings guidance. Management now projects adjusted EBITDA of $104 million to $109 million in 2022, up from its previous estimate of $100 million to $105 million.

“While the political, fiscal, and economic landscapes continue to shift around us, we have maintained strong and consistent momentum in our business,” CEO Anthony Noto said in a press release. “We built our products and services to provide durable growth and profitability, and that is what we are delivering.”

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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